Institutional Arbitration Grows in Popularity

The Board of Arbitration of the Central Chamber of Commerce in Finland is an impartial body designed to settle international and domestic business disputes by arbitration if this is provided by an arbitration clause or agreement.

The Rules of the Board of Arbitration do not differ much in any material respect from the provisions of the Finnish Arbitration Act.

Proceedings

Institutional arbitration proceedings are initiated by filing a request with the board, including a preliminary statement of the claim and the name of the filing party's appointed arbitrator. The board will then request the other party to submit a written reply, which must include a response to the statements and identify that party's arbitrator.

If the parties have not agreed on the number of arbitrators, three arbitrators will be appointed unless the board considers it more appropriate to appoint a single arbitrator. In other cases the parties shall appoint an equal number of arbitrators and the board shall appoint the chairman, unless the parties have agreed otherwise.

If the opposite party wishes to raise any objection concerning the validity of the arbitration agreement or its applicability to the dispute, such objection and the grounds for it shall be included in this response. If the opposite party wishes to make a counterclaim or demand a set-off, it shall also present the grounds for such and a preliminary notice of the claims in the response. A counterclaim or set-off is available only if the arbitration agreement covers it.

Each party shall be given sufficient opportunity to present its case. In other respects, the provisions in the arbitration agreement regarding the arbitration procedure must be met. The arbitral tribunal shall determine any procedural matters not covered in the arbitration agreement in accordance with the Rules of the Board of Arbitration together with requirements of impartiality and promptness. Where possible the wishes of the parties shall be accommodated.

The arbitrators shall decide the dispute in accordance with the law. If the parties have agreed that the law of a particular country should be applied to the dispute, the arbitrators shall base their award on this law.

The arbitral award must be rendered within a year of the board sending the case file to the arbitrators. The board may grant an extension to this period upon the arbitral tribunal's request. If the dispute is settled during the arbitral proceedings, the arbitrators may record the settlement in the form of an arbitral award or agreed terms.

Statistics

The amount of cases in institutional arbitration has increased steadily in recent years.

According to the Finnish Companies Act a shareholder holding more than nine-tenths of the shares of a company has the right to redeem the shares held by other shareholders at the market price. According to the Companies Act any disputes relating to the redemption or the redemption price must be settled by institutional arbitration. The redemption cases are included in the yearly figures of the above table. There were 15 redemption cases in 2000 and 12 in 2001.

For further information on this topic please contact Jouko Huhtala, Marko Hentunen or Johanna Pulli at Castrén & Snellman by telephone (+358 9 228 581) or by fax (+358 9 601 961) or by email ([email protected] or [email protected] or [email protected]).